With Amazon kicking the Comixology staff to the curb in a staggered layoff, there are a lot of wild rumors flying around. It’s time to take a deep breath and look at what we do and don’t know. Because transparency is not a word that’s been uttered about Amazon’s plans for digital comics.
I’ve been away from the site for a bit, so first a little background on why I got tapped to talk about the state of digital comics as the Amazon fallout is reigning down: As a semi-reformed academic (I’m speaking at USC about entertainment marketing and fandom next month), I used to teach eBusiness at Columbia College Chicago and wrote three books on The Economics of Digital Comics that have been taught at the college level. David Steinberger told me the first book was the only citation they could find to back up Comixology’s original business plan when they won that first pitch contest. I’ve been attached to a couple of digital comics/publishing startups and once upon a time wrote, lettered and packaged a digital comic strip for the Chicago Tribune Media Group. I also sat next to co-founder John D. Roberts at Marvel when I interned there in grad school. I haven’t been in the rooms at Amazon, but I can speak as someone who’s worked in the general space.
The first thing we all need to agree on is that we don’t really know what’s going on at Amazon at the moment. Amazon very rarely comments on anything, so their silence on the Comixology situation is not unusual. It is, however, incredibly damaging to consumer confidence and not exactly what you might consider “putting the customer first.” The silence encourages speculation, and so, here we are.
Here’s how we’re going to break this down:
- A short history of Amazon gaffes with Comixology
- What’s going on at Amazon overall (which may have exacerbated the Comixology situation)
- What we do and don’t know right now
A Short History of Amazon Gaffes with Comixology
As we all know, when the iPad dropped and became the preferred reading device for digital comics, Comixology took off like a rocket. It was near the top of the charts on iTunes. And then in April 2014, Amazon bought them.
Now, before we go any further, I’ve seen a few angry comments aimed at Steinberger about his choice to sell to Amazon. Here’s the thing: I have never seen an official disclosure about the terms of sale. Oh, I’ve heard a few stories. Nothing I could verify in the first person.
I can tell you this: I was attached to a digital publishing start-up in 2013 and we were watching Comixology closely. There’s never been a good time to fundraise for digital comics (for example, graphic.ly had apparently failed spectacularly enough to poison the well with several San Francisco-based investors at the time) and we were not the only ones trying to figure out when Comixology was going to run out of money and be forced to sell if they couldn’t raise another round. I had that date being late Summer/early Fall 2014.
Since Apple doesn’t traditionally like to buy the apps in their store, we had the likely purchasers as Warner (DC), Disney (Marvel) or Amazon. Any of those three would probably have upset at least a portion of both the consumer audience and publishers using the platform.
To this day, I’ve never heard what the price tag Amazon paid for Comixology was. There were multiple acquisitions at the time and Amazon never really broke down the particulars. That said, this does not appear to have been Facebook backing up the money truck for Instagram. From the outside it looks a lot more like “startup was sold and business continued” than “selling out to Amazon.” Given the climate in ’14, I really don’t see where anyone can get mad at Steinberger for what was probably the best offer on the table when it was time to sell. (And yes, investors do get very concerned about taking the best offer.)
When Amazon acquires a startup, you expect them to get integrated into the Amazon brand. Usually subsumed. Audible seems to be the notable exception to this. Even Createspace (the Print on Demand operation) is now simply a feature on the Kindle Direct Publishing platform… which is actually kind of humorous, since print is the opposite of Kindle, but that’s how they want to brand it.
How comfortable a fit was this acquisition? Right out of the gate, problems seemed to start. The two big ones that everyone is still dealing with the fallout from are the payment issues and the technical compatibility.
Famously, Amazon decided at the corporate level that all transactions would be conducted on Amazon’s payment system, not iTunes/the Apple system. Now, since the iPad was the platform of choice for reading comics, this meant that readers couldn’t buy inside the app. They had to go back to the website, but there, then return to the app to read. A clunky user experience to put it mildly. And right there Comixology switched from a high growth app to a largely static one, with the apparent exception of the lockdown years.
Amazon is a very growth-oriented company. Always has been. You have to suspect this lack of growth was a point of contention for YEARS in internal meetings and politicking.
Second, you heard nearly constant stories that the Comixology tech stack wasn’t compatible with Amazon’s and it was going to have to be rebuilt.
There was hope that sales would eventually spike when Amazon fully integrated Comixology into the system, but it seems like that spike never happened. Not the least of the problems was the “regular” Kindle and the Kindle Paperwhite are black & white eReaders. The Kindle Fire, the color option, is what you’d need and that didn’t seem to be pushed as hard or as popular. But for whatever ultimate reason, that wasn’t happening.
And then, in September 2021, Comixology announced the inevitable change. That’s when David Steinberger announced that Comixology website was going to be shuttered and incorporated into the Amazon website. It was supposed to happen in October. And then in November. It finally happened in February 2022. Why was it delayed? No one has spoken about that.
So, in February ‘22, we have a new Amazon-centric Comixology browser – which no one liked. We had more Amazon integration on Kindle – which no one liked and there are some extremely valid points about trying to manage a large comic collection on Kindle that has not been properly addressed. The buying of new digital comics moved over to a Comixology-branded digital comics page on Amazon with what everyone seems to agree has some fairly clunky UIX. Not only were people having trouble finding the new issues, buried at the bottom of the page after everything Amazon was pushing, but when the weekly sales/deals were posted, they didn’t always have the right prices on them. DC seemed to have the worst problem with this and it lasted for months, got better and then returned in recent weeks. Yes, for whatever reason, Amazon was having trouble displaying sale prices on dedicated sale pages. It was not a well-oiled machine.
Comixology Submit was canceled and creators re-routed to the Kindle Digital Publishing platform, which is not a good fit and don’t get me started on download fees for graphics.
The customers were outraged. Sales tanked. Publishers noticed. A few months later, creators noticed the difference in their royalty checks. It was a really bad scene.
There were some improvements made to the apps and web interface. Incremental improvements as the cult of management processes would likely term it. Nobody has been willing to say ON THE RECORD that sales returned to normal levels. There’s more chatter off the record that sales are down than that sales returned and it’s unclear how much to trust the off-the-record comments. My best guess is that sales moved upwards after a multiple month cooling down period for the readers, but it probably didn’t quite get back to where it was. Great job Amazon! Rush that changeover before it’s ready! I would be shocked if that timeline originated anywhere but from higher up the corporate ladder.
And then in January 2023, Amazon decided to issue walking papers to the Comixology staff who hadn’t already fled.
What we would appear to have here is a misalignment between Amazon and Comixology. Some much larger, company-wide initiatives like that payment scheme actively harmed the Comixology unit. It was a smaller unit, so it’s unclear if anyone cared at the top level of Amazon. The integration of Comixology into Amazon did not and has not gone well.
If we’re realistic, if the closure of the Comixology website was announced in September ’21, work should have already begun on the aggressive integration changes. The decision was likely made months earlier. July ’21? June ’21? Earlier than that? We’re likely a year and a half to two years into an integration plan.
Deep down, most people knew integration was likely when Amazon made the purchase. Would Comixology have remained a separate website and interface if it had continued to grow its user base and revenues? Maybe. Maybe not. It’s hard to say. Growth did not seem to be in the cards once the payment systems switched. Honestly, total integration into Amazon-proper could be the best hope for digital comics growth at Amazon – much further down the line, if they fix a lot of things and haven’t permanently alienated their user base.
What’s Going on at Amazon Overall That Likely Exacerbated the Situation
As you may have heard, much of the “Big Tech” world is on fire with layoffs. The activist investors are starting to emerge from the woodwork, urging various tech companies to lay off even more people. It’s not a pretty picture and Amazon is in the middle of this trend.
Comixology was caught in a round of 18,000 layoffs. This follows 10,000 layoffs in November. That’s 28,000 people laid off in 3 months. There is a possibility the Comixology folks got caught in a numbers game.
This Vox article will give you a taste for how dire things seem to Amazon higher ups, including a $8 billion loss for the core retail business in Q1-Q3 and complaints that Amazon’s not frugal enough and overfunding things. OK, somebody complaining about Amazon not being frugal enough is potentially funny, since they used to be notoriously over-the-top with that… but it does paint a picture of a company that REALLY wants to slice costs.
And remember, Amazon has traditionally weighted a lot of its compensation towards stocks and options. A poorly performing stock will cause more employee problems for Amazon than some other companies might experience, particularly outside of the tech sector.
How badly did Amazon want to cut costs? They cut Smile, a program that donated 0.5% of certain purchases to various charities, claiming “program has not grown to create the impact that we had originally hoped.” A lot of people did not react well to that rationalization.
If the purchase hadn’t been 9 years ago, I’d be wondering if Amazon were pulling a Discovery and trying to take a tax write-off on Comixology, but I suspect it’s been too long for that. Ask the accountants, I suppose.
Easy to be laid off in that kind of a cost-cutting environment, I fear.
And then there’s the mystery of “Kindle Unlimited for Magazines.”
That’s the name of a new program Amazon’s supposed to be rolling out in the Fall (of ’23). No more single-issue magazines or magazine subscriptions.
Publisher’s Weekly says:
Print and digital magazine and newspaper subscriptions and single-issue sales available on Kindle Newsstand will also be wound down next year. Amazon had been offering print magazine subscriptions for sale in the U.S., and digital magazine and newspaper subscriptions and single issues for sale in the U.S. and three other markets. A selection of magazines and newspapers, believed to number in the hundreds, will continue to be included in Kindle Unlimited.
Good eReader says that magazines aren’t required to be exclusive to Kindle Unlimited (books most certainly are) and payments will be determined by the number of subscribers inside KU, which is a new concept.
This is all supposed to switchover from newsstand to KU in September with subscribers notified in March, so perhaps we’ll have a little more granular detail in March?
The elimination of the Newsstand feature is thought to be more cost cutting, but Amazon also loves to funnel people into its in-house subscriptions like KU and Prime, so it’s hard to know which factors in larger.
Kindle Newsstand is not comics, but comics are periodicals. Thus far, comics have not been mentioned in this context, but a handful of people have raised some questions about this and in the greater context, it’s worth asking some questions. We’ll come back to this in a bit.
What we do and don’t know right now
Most of what we KNOW is summed up here. Around 75% of the Comixology was laid off. The remaining 25% will be exiting in two waves, one in June and one in October.
There were new comics this week. There were even new sales on the “Deals” page, although as I type this, not everything on sale appears to have a sale price – not remotely a new problem.
That’s about all we KNOW.
It seems reasonable to expect that there are still new comics through October, if there are Comixology staff around. It seems reasonable that there will be comics AFTER October, because why would you spend money to retain staff on something you were planning on dropping?
It also seems unlikely that Amazon would want to drop comics when they have that exclusive with Marvel for single issues in digital. Are they keeping staff around because of that exclusive? If Marvel’s exclusive was up in October, there would likely be buzz about that, but… I haven’t heard a date for that. Seems unlikely.
On face value, this looks like a round of cost cutting as they clear out the Comixology brand and finish integrating digital comics into the Kindle system.
What would I expect to follow if this is the case?
- The Comixology app to be discontinued no later than October
- All comics reading migrated to Kindle (This is not new. It’s already migrated if you want to use Kindle for your comics. Most power users don’t seem to want to do that and won’t be happy about it unless improvements are made.)
- The Comixology branding removed from the digital comics home page
- They cut the comics subject matter experts down to 2 or 3 people and treat it like the Mystery section or the Romance section. Minimal curation. Lower cost upkeep. Automated listings when possible.
What questions do not have answers right now?
- If that many staff have been cut, is Guided View continuing?
- I have not heard a peep about the future of Comixology Originals
- I have not heard a peep about Comixology Unlimited (which might need a new name if the branding changes)
It’s a little early to hear rumblings of sales reporting, but with the reaction to the Comixology layoffs appearing to be even worse than the reactions to the Comixology website going away – with cause, we might add – it seems likely that sales are going to hit a trough again. Perhaps we’ll hear about that in a few weeks – not for attribution, of course. And this means the publishers and creators are likely to take a hit. It would likely be worse for DC and Image creators, or anyone whose royalties are tied to net revenues. You see, the standard publisher deal with Amazon is a 30% discount (i.e., the publisher keeps 70% of list). A distributor is likely going to be getting more like a 50-55% discount (i.e., publisher keeps more like 45-50% of list, possibly a bit less). Digital sales are worth more on a per unit basis.
While there’s no good time for the major digital platform to alienate readers, this seems like an especially bad time with the somber mood retailers and creators have been projecting in their end of the year/state of the industry conversations.
Will digital sales recover? Wait and see. Amazon’s silence isn’t helping one little bit, but they’re unlikely to make any announcements unless there’s a change of service – like we’re hearing about with the digital magazine situation. So, all seems like things should proceed normally for the near term. It’s hard to blame a reader if they want to pause for a bit and see if anything changes. And that right there is where Amazon’s silence does the most damage to the industry.
Now, if you’re a digital comics reader on Amazon and comics really aren’t going anywhere, there are some questions that should be at the top of your mind, and you might as well ask Amazon about it through any channel you can find:
- What improvements are planned for reading comics on Kindle?
- What improvements are planned for sorting my comics collection on Kindle?
- What improvements are planned for navigating and discovering comics on the Amazon web platform?
And remember, if we’ve learned anything from how long it took the Comixology website to disappear vs. when it was originally announced the website would disappear, it’s that these things do not always operate on the timeline that Amazon thinks they should.
But let’s go back and plug that Kindle Unlimited for Magazines information into what we know about comics at Amazon, because it really does make you raise an eyebrow. I want to emphasize that there do not seem to be any comics publishers contacted about and the magazine publishers were contacted in mid-December. This does not seem to be happening right now.
That said…
We haven’t heard anything about Comixology Unlimited one way or the other.
This is where we need to cast an inquisitive eye towards whatever is going on with Kindle Unlimited for Magazines. There’s knee-jerk reaction to say “who cares if they got rid of subscriptions, subscriptions haven’t been a big deal in comics for a long time.” That’s not necessarily true.
Pull-boxes, an increasingly important part of comics retailing are sometimes referred to as “in-store subscriptions.” Call them a standing order, if you must, but it’s a form of subscriptions. We don’t see subscription data out of DC and Marvel these days, now that there aren’t circulation audits or postal statements anymore. I’m counting 13 emails in 2022 asking me to subscribe to various Marvel (print) titles for up to 40% off. Mid-Town Comics runs that program. Most importantly, Comixology and Amazon offer comic subscriptions.
That’s right, click a button and Amazon will send the new issue to your device of choice and ring your credit card for it. It started out as a Comixology feature and when the Comixology site shut down, the subscriptions were ported over to Amazon, as long as you merged your Comixology account with your Amazon account… unless you didn’t live in the United States. Foreign subscribers lost the ability to subscribe and there was some shouting about that in the various online forums.
So the magazines had the subscription option removed and comics didn’t? That’s interesting.
The magazines are switching over to Kindle Unlimited in September and the last of the Comixology staff are scheduled to leave in October. If single issue comics were getting placed in that program, that would be keeping some people around for a month to troubleshoot anything that came up. Probably just a coincidence. Though the questions linger:
- What kind of costs savings are possible if Amazon is only processing comics that sell above a certain threshold? (Why yes, that IS a time-honored question about which comics Diamond will carry. Give yourself a point for paying attention. The difference here being a jilted title could still be submitted to the KDP platform for a significantly worse deal.)
- Since magazines are getting bundled into Kindle Unlimited, is Amazon contemplating consolidating anything else into Kindle Unlimited? Say… Comixology Unlimited? And remember, Comixology Unlimited’s payout is very different from Kindle Unlimited… much like Kindle Unlimited is apparently about to treat magazines differently from books. This is a rabbit hole with many questions.
These are Return on Investment type moves for the benefit of the stock price when they start whittling it down to only the most popular offerings and reducing the staff needed to run a given program.
These kinds of changes to single issue comics and subscriptions do not appear to be happening at the current time, but this is something we should keep an eye on as a conversation that could come up a year or two down the line, if the Kindle Unlimited for Magazines scheme is successful. Changes are being made and there’s not that much distance between Vanity Fair and Saga from the perspective of delivering a digital file once a month.
At least none of the non-comics moves suggest a change in how the digital graphic novels/TPBs would be targets for cost controls… although that doesn’t mean something isn’t being discussed in the current environment.
In summary, we know digital comics are still in place at Amazon, but we don’t know much else or if more changes are being planned until somebody at Amazon decides to respect the customers and spell out what is and isn’t changing.
Until Amazon talks, we’re going to have more questions and guesses than answers.
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